Tech blog

Decline of an industry

»The Newsweek’s announcement that it will go all-digital sounds like an obituary of newspapers in the Western countries. For decades Newsweek and Time magazines have been hugely influential fixtures of the publishing industry. While Time, part of a media empire with immense resources, continues to survive, Newsweek got hit. 

In the US, the epicentre of the disruption of the print media, 152 newspapers shut down in 2011. The number was nearly the same, 151 in 2010. All of them were stripped of their readers and advertisers by the Internet.  

Ironically, media consumption is growing worldwide. TV, radio and web sites continue to see a growth in their audience. It is only the print that has been at the receiving end as yet. The publication frequency of dailies and magazines is incongruous with the demands of the digital age. At a time when people follow news as it breaks, why would they wait till the next morning or even a week to get the updates.

Smartphones and tablets have changed the work habits; people start checking their emails before they say ‘Good Morning’ to anyone. They find it hard to find the 15 or 20 minutes required to read a newspaper in the mornings. They prefer to check news on the go, where other devices score over the printed newspapers.  

Realising this, newspapers in the West began to go online and make radical changes in the way they worked. But the problem: the revenue they get online is no patch on what they used earn earlier in the print. There is no access barrier to get the news you want online. It is free. Advertisers have also been very demanding on the online media as they can measure their returns to the last detail. There is seemingly an inexhaustible supply of inventory, which helps them to keep the rates down.  

To survive many newspapers are erecting pay walls. It is better to have a lakh of paying readers than a million free riders. Newsweek digital will be through paid access. The New York Times has been fairly successful in enforcing subscriptions. The Wall Street Journal has been for paid only for as long as anyone can remember. But as of now, there are more sceptics than subscribers to this model.

The decline of newspapers is accompanied by another dangerous trend in the media: consolidation. As the smaller players shut down, larger companies are buying. An unprecedented amount of media power is getting concentrated in a few hands.  Six companies, GE, News Corp, Disney, Viacom, Time Warner and CBS own 90% of American media.  

These are not healthy developments for any society, which relies on the media to enforce accountability on the governments and the private sector. Will the rising troops of bloggers, aggregators and citizen reporters provide an effective alternative to full-time specialist journalists? Your guess is as good as ours.

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